Ohio gains $18.7 billion in shale investment

The Utica Shale play has brought $18.7 billion in investments to Ohio, and the Mahoning Valley certainly has received its share of the wealth.

That’s according to the most-recent accounting of the Columbus-based law firm Bricker & Eckler LLP, which has been tracking shale-related infrastructure and development projects since early 2013.

In total, 105 projects are underway or completed in Ohio, according to the firm’s Shale Economic Development Overview report for spring 2014. The projects are diverse, ranging from pipelines and plants to training grants and construction of hotels and new office space.

Most are concentrated in the eastern portion of the state, but Bricker & Eckler listed shale-related projects as far north as Cuyahoga and Lucas counties and as far west as Allen and Butler counties.

But the Mahoning Valley — situated on the northern end of eastern Ohio’s Utica Shale — is in prime position to cash in on the substantial interest surrounding the play.

With 30 projects specific to Columbiana, Mahoning and Trumbull counties, the Valley is home to nearly 29 percent of all Ohio projects and 18 percent of the total investment, with at least $3.4 billion spent here, according to the report.

A joint venture between Hilcorp Energy Co. and NiSource Midstream includes the construction of 50 miles of gas-gathering pipelines leading to Pennant Midstream’s cryogenic gas processing plant in Mahoning County.

The company recently announced it will build another 38 miles of pipeline, bringing the total price tag to $390 million.

A mammoth project by Utica East Ohio Midstream LLC — an M3 Midstream joint venture with Chesapeake Midstream and EV Energy Partners — involves the construction of a Kensington cryogenic plant and a separate fractionation facility in Scio, connected by 60 miles of pipeline.

The company is building another cryogenic facility in Leesville. The effort will cost $1.2 billion.

Mahoning County’s six projects include the Hickory Bend processing plant, part of a $375 million investment, which includes about 55 miles of 20- and 24-inch wet-gas gathering pipeline facilities.

Other companies have bought space in the county to support shale operations.

For example, investors from the Valley and Canada headquartered the startup U.S. Petroleum Exploration in Canfield.

For $10 million, Industrial Piping Specialists Inc. opened its 11th U.S. warehouse at Castlo Industrial Park, which could employ as many as 60 people.

A Vallourec Star sister company soon will begin construction on an $81.6 million steel-pipe threading plant in Youngstown, which is expected to hire at least 80 employees.

Trumbull County led the Valley with 15 projects, according to Bicker & Eckler.

The $1.3 billion in investments include training programs, an equipment-processing plant and a new, 87-room Comfort Suites hotel.

The status of a $70 million rail-transloading terminal at the Ohio Commerce Center, spearheaded by Halcon Resources Corp., remains uncertain after the company announced it will suspend drilling operations in the area, pending results from two wells.

Though returns on the wells drilled in the Valley have been less than stellar, the area clearly has benefited from the success of the play’s southern tier, said Shawn Bennett, field director for Energy In Depth Ohio.

“The investments in the Mahoning Valley, anchored by Vallourec Star, show that while there is significant investment in the core shale region to the south, the benefits extend far beyond where the wells are being developed,” he said.

“While a lot of these are in the core shale-producing region, you’re seeing even more investment in the peripheral regions.”

As companies have developed more wells in the past year, there has been a greater willingness to increase capital investments amid high returns, Bennett said.

In fact, shale-related investment has climbed by more than $6 billion in Ohio since the firm last published an economic-development assessment in fall 2013, a trend that Bricker & Eckler associate Matt Warnock expects to continue for years to come.

“You’re going to see a tremendous amount of growth in terms of economic-development opportunity,” he said, adding that the list is a conservative one.

“There are projected projects out there not included on this list that are directly related to the shale boom,” he said.